BofA's 5 Takeaways From Advanced Micro Devices' Computex Announcements

Advanced Micro Devices, Inc. (NASDAQ: AMD) has several major product updates coming out this year, and the company made several key announcements at the Computex trade show last week.

The Analyst

Bank of America Merrill Lynch analyst Vivek Arya outlined the key takeaways from Computex for AMD investors in a Sunday note and reiterated a Buy rating and $17 price target for AMD stock.

The Thesis

AMD has a solid pipeline of products and a large addressable market, and the long-term upside for the stock hinges on execution, Arya said in the note. (See the analyst's track record here.) 

Arya named five major takeaways from Computex:

• AMD’s next-generation EPYC server MPU, "Rome,” is on schedule for release in the second half of the year.
• AMD is on track to release the world’s first 7nm GPU “Vega” at some point in 2018.
• TENCENT HOLDINGS/ADR (OTC: TCEHY) is now an EPYC customer.
• Hewlett Packard Enterprise Co (NYSE: HPE) has expanded its EPYC-based offerings by adding the ProLiant DL325 Gen 10 server group to its lineup.
• AMD introduced its second-generation high-end PC MPU “Threadripper,” which the company expects to launch in the third quarter.

Even after a nearly 50-percent gain year-to-date, Arya said Wall Street still doesn’t fully appreciate the size of AMD’s total addressable market. AMD has positioned itself well to gain server market share from rival Intel Corporation (NASDAQ: INTC), the analyst said. 

“Our recent pricing analysis suggests AMD’s ability to close its pricing gap with INTC remains underappreciated." 

Price Action

AMD shares were rallying 4.1 percent late in Monday's trading session to $15.88. 

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